Investing in the dark: Australian companies are failing to properly disclose climate risk

14 Mar 2018

Market Forces analysed the public disclosures of 73 ASX100 companies that operate in sectors facing the highest levels of climate risk. 

Climate risk disclosure across these companies was found to be largely inadequate, leaving investors and the public in the dark about the massive dangers climate change poses to the economy. The vast majority of companies have failed to incorporate the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), an initiative backed by investors managing over AU$100 trillion.

Of the 73 ‘high risk’ ASX100 companies analysed:

  • Less than two thirds have acknowledged the Paris Agreement and/or the need to decarbonise the economy;
  • Less than half (49%) identify climate change as a material business risk;
  • Only 10 have published some form of scenario analysis;
  • 86% have not disclosed scenario analysis consistent with a 2 degree policy pathway, as set out under the Paris Agreement;
  • 84% do not have a plan to reduce greenhouse gas (GHG) emissions;
  • 60% do not have an emissions reduction target;
  • 79% do not disclose GHG emissions in their annual or sustainability reports.

Clearly, voluntary schemes are not resulting in sufficient climate risk disclosure from companies.

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